Please share your favourite Moving average levels
- Thread starter victorycountry
- Start date
Here is an example of the clear uptrend in place in the SPY until mid 2015. It also shows how JUST following MA crossovers from August 2015 until now would have resulted in large whipsaws. MA crossovers are a LAGGING indicator so they tell you information about the trend after its started. By the time you follow it the "trend" may reverse like in a trend less market where prices move sideways.
I use the MACD on longer term as well, I love using the bullish divergences while in uptrends and opposite for downtrend using the Historgram, highly reliable pattern for me. Another pattern I love is waiting for Triple/Double, H&S tops/bottoms then instead of like near the 39, buy so many points below the 39, it is usually where the 39 has slight dip of couple bars, this is where slower moving averages are far better than fast moving averages, want that slowness so less false signals. Either give it a couples bars to go in profitable direction, if I am buying stocks, I hedge with Debit Put Spreads, when market going my direction, lift the short put and keep long for double profit, and then wait for slight dip to add Put Credit spreads. I never do Weekly options unless system geared to getting out in less than 4 days and have a 15% or less losing trades, otherwise best to get options few months till expiration for me.
I seem to remember from reading Trading for a Living, many years ago, that Alexander Elder regards that one as just about the most reliable, simple indicator-based signal there is.
Well,... I didn't want to give away too many tricks but yes I use other MA longer than EMA 39 as well & I use multiple timeframes to help better time my entry into a trade. As a swing trader I tend to use short time frames to ENTER a trade in the direction of the longer time frame's trend. I tend to EXIT a trade based on a short time frame IF I am early in a trade (days to weeks) and use longer time frames to EXIT trades that are matured (weeks to months). This method has helped me avoid whipsaws and maximize my trading profit per trade. But sometimes you have to be willing to give up a little of paper profits to maximize BIG gains. It is not uncommon for me to make gains of 30-70% on a trade using these methods.
For every touch and reversal there are at least two more that fail.
Squiggly lines can show a trend but so can just looking at the bars.
To me the validity or not using a particular technique shows by how often it doesn't tell you something. As they say even a broken clock is right twice a day.
Support and resistance is where more buying than selling (and vice versa) meet, not where MA lines meet.
Squiggly lines can show a trend but so can just looking at the bars.
To me the validity or not using a particular technique shows by how often it doesn't tell you something. As they say even a broken clock is right twice a day.
Support and resistance is where more buying than selling (and vice versa) meet, not where MA lines meet.
Oh there are PLENTY of times when this does NOT work. However, it's a calculated risk you take if a win is a large win it more than makes up for the small losses. Everyone has to decide what works for them and do more of that.
My long Term Commodity system is where I will make $10k on half the contracts and in deep past watch me lose $20k back to breakeven as NONE of the back tests I have performed have shown long term to get me the homerun trades which I now make but after many rollovers, having trailing stops. But long term I use monthly, weekly, daily and intraday to get into the trades of futures and ever entry is hedged, I have gotten pretty good knowing and programmed when it should reverse so Open profits are hedged with debit and credit spreads, so even the added on trades are all taken in this manner, so it gets many rollovers, but it works.
After 38 years, I have finally designed a decent stock swing trading method I can stand and every month making it better. At my age now, simple can't stand having much of a loss, so past six years I have studied for most part Risk, how to find reasons to avoid trades that will lose, average 2 of those a week for day trading, and long term stocks it much easier to avoid some trades based on monthly and weekly being in area more than it should, stocks are easier cause so much more of them.
I use support and resistance a good deal in day trading, but just way different ways than most I believe, and cause of the amount of time I am in most trades don't exceed much more than 3.5 minutes, so S/R produces entries, but I use them much more in changing how entries are requiring much deeper retracements, knowing what the corrective wave ranges for each market day traded and know exactly where price can to go for trend change gives me edges beyond most retail traders. But way too many on this site don't have a clue or to lazy to read charting books.
Moving averages are no different than trend lines, price goes through them as well, it is up to a skilled trader to know how to define patterns that they see.
Happy long weekend all.
well, in this hospital everybody has the same illness - impotence (as a trader)
and the cure is the same - robust method
but nobody will share the cure